More Americans Delaying Retirement

People hamstrung by a lack of
savings are delaying a wide number of major life events, such as retiring,
buying a home, going to graduate school, getting married or even starting a
family. This is the finding of a survey by the American Institute of Certified
Public Accountants (AICPA).

Eighteen percent are delaying
retirement, up from 9% in 2007; 24% are putting off higher education, up from
11%; 22% are postponing buying a home, up from 14%; 19% are delaying a medical
procedure, up from 9%; 12% are putting getting married on hold, up from 6%; and
13% are delaying having children, up from 5%. Overall, 51% of Americans have postponed
at least one important life decision in the past year due to financial
concerns, up considerably from 31% in 2007.

Asked specifically what kinds of
financial setbacks they are facing, 60% said a lack of savings, 50% reported concerns
about the U.S. economy, 39% claimed difficulty paying non-mortgage bills, and
29% cited medical bills. Other drawbacks: taking care of elderly parents (29%),
paying down credit card debt (28%), the fear of losing their job (27%) and
difficultly making mortgage payments (25%).

These concerns are somewhat
surprising, given that many Americans say they have recently taken positive
financial steps, such as improving their financial behavior since the recession
(85%), following a monthly budget (58%), increasing their savings rate (44%)
and contributing to an emergency fund (35%).

The findings suggest that
retirement plan advisers and sponsors need to do a more rigorous job of helping
people with their overall financial wellness.

If people do not have adequate
savings, then their decision to delay major life events makes sense, says Ernie
Almonte, chairman of AICPA’s National CPA Financial Literacy Commission. “When
making major life decisions like buying a home or getting married, it’s crucial
that you consider both the short- and long-term financial implications,” he says.
“If you don’t have adequate savings in place or you’re having trouble paying
your bills, it may make sense to hold off on major life decisions until you’re
on more solid financial footing. The most reliable way to afford the costs of
major life decisions is to start saving at a young age and increase your
savings rate whenever possible.”

AICPA’s National CPA Financial
Literacy Commission recommends that people take the following four steps to
improve their financial outlook: